United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR JOEL DONOVAN (of Counsel) Instructed by: Messts Beachcroft Wansboroughs Solicitors 100 Fetter Lane London EC4A 1BN
For the Respondent	MR PAUL EPSTEIN (of Counsel) Instructed by: Messrs Irwin Mitchell Solicitors 150 Holborn London EC1N 2NS

SUMMARY

Contract of Employment

Contract of employment – damages for breach – tribunal entitled to find on the facts that hospital registrar's appointment qualified for pay protection under nationally agreed terms on subsequent rebanding.

MR COMMISSIONER HOWELL QC

1. This appeal is before us today for full hearing pursuant to the directions given in chambers on 21 October 2004. The Respondent to the proceedings below, the Great Ormond Street Hospital for Children NHS Trust, is seeking to have set aside as erroneous in law the Decision of the London Central Employment Tribunal, which sat on 19 May 2004 under the chairmanship of Mr G P Sigsworth. The Tribunal's reserved Decision with Extended Reasons was sent to the parties on 11 August 2004, and is before us at pages 1-7 of the appeal bundle. In that Decision, the Tribunal upheld complaints by Dr Qasim, a Specialist Registrar at the Great Ormond Street Hospital, who had a one year appointment from 2 September 2002 to
   31 August 2003.
2. His complaints were of breach of contract (within the jurisdiction of the Employment Tribunal under Article 3 of the Extentsion of Jurisdiction Order 1994, because it was an outstanding claim at the date of termination of his employment) and further or alternatively for unlawful deduction from wages in not paying him what is referred to as a "Band 3 supplement" on his remuneration, which is a supplement prescribed under the National Whitley Council Terms for doctors whose hours of work are very high. As the Tribunal rightly said, there was a complete overlap between the two claims and they depended on the same issue. The amount of supplementary remuneration in dispute is recorded as being some £7,000, but the Tribunal's Decision deals only with the question of whether there was liability to pay it. It recorded that, there having been no application for a further hearing to deal with the question of remedy, the Tribunal assumed that that was a matter which the parties were able to resolve between themselves; and before us there was no suggestion that was wrong.
3. The facts are set out in paragraphs 3 and 4 of the Tribunal's Extended Reasons, from which it is convenient to quote rather than attempt to summarise:

"3. Between September 1999 and August 2002, the Applicant was employed by the Institute of Child Heath [that is at Great Ormond Street] as a clinical research fellow in molecular immunology. During this period, he also held an honorary specialist registrar contract with the Respondent and participated on the specialist registrar on-call rota for paediatric immunology and infectious diseases. The rota was a 1:6 on-call with prospective cover. In December 2001 the post was placed in band 3 by the Respondent following a monitoring exercise of the hours worked. On 14 February 2002, the London Deanery advertised national recruitment to specialist registrar posts in paediatric sub-specialties in the British Medical Journal, such posts due to commence in September 2002. This was a national advertisement open to all UK doctors.

4. The Respondent delegated to the London Deanery the responsibility of advertising, interviewing and the recruitment / selection of doctors to these posts, but the contract of employment was between the doctor and the Trust. The Applicant applied for two posts, and was interviewed certainly for one of them at Great Ormond Street. The job description for the post stated that participation on a 1:6 on-call rota was required. As the Applicant had worked and continued to work on such a rota, he knew it attracted a band 3 supplement. He was short-listed and interviewed for the Great Ormond Street post on 28 March 2002, the interviewing panel including a representative from the Respondent. Following this, he received a letter from [Mr Tom] Power of the London Deanery dated 4 April 2002, offering him the post of specialist registrar in paediatric immunology / infectious diseases at Great Ormond Street on a one year contract beginning on 2 September 2002. It was said that the Respondent would contact him regarding the appointment and induction. The Applicant said that he returned a signed copy of the letter to [Mr] Power accepting the post, as requested. There was no evidence from [Mr] Power to contradict this. As far as the Applicant was concerned, he accepted this offer on that basis that at the time the post was a band 3 post, and it was and had been non-compliant as worked by him on a 1:6 rota."

We should interpose that the Tribunal found, and it is not now disputed, that the Applicant had in fact returned the signed copy of that letter to complete acceptance of the post on the basis that he understood it to have been offered. The roles of the London Post-Graduate Deanery and its officer Mr Power (mistakenly called "Dr Tim Power" in the Tribunal's Decision) are explained further below.

4. Band 3, as we have already indicated, was a special band of remuneration to supplement the pay for posts which were described as "non-compliant", where the hours were in excess of those permitted by the Working Time Directive; the policy of the Health Service being to reduce junior hospital doctors' hours progressively by introducing schemes to reduce both the hours worked and the banding, so as to secure greater compliance with the Directive. This was described as the "New Deal initiative", to which the Tribunal referred in paragraph 6 of their Extended Reasons as follows:

"The principal aim of the New Deal initiative is to reduce doctors working hours to acceptable limits, to ensure reasonable rest periods and to generally improve living and working conditions for junior doctors in line with the national commitments to implement the Working Time Directive for junior doctors in training from August 2004. Junior doctors, i e doctors in training, are employed in accordance with terms and conditions set by the Trust, but these largely follow national pay and conditions of service, commonly referred to Whitley Council terms and conditions. The Whitley terms for junior doctors were amended as part of the New Deal initiative with effect from 1 December 2000, and an Advance Letter dated 7 February 2001 provided the amendments to the terms and conditions of the contract for junior doctors."

There were in evidence before the Tribunal, and in the appeal documents before us, copies of the relevant nationally agreed terms and conditions which were approved (and thereby accorded semi-legislative force) by an officer on behalf of the Secretary of State for Health on 7 February 2001, as recorded on page 49 of the appeal bundle.

5. As the Tribunal recorded, the post for which Dr Qasim applied and to which he was appointed following his successful interview in March 2002 was not at that time a "compliant" post; and the Tribunal found, in accordance with the evidence before it, that at that time it attracted a band 3 pay supplement. It is common ground also that although the review and alteration of the hours required of such a post-holder, and consequently the rebanding of his post, may have been in contemplation at the time Dr Qasim was interviewed and accepted his appointment, that process was very far from being completed and effective at that time. As the Tribunal recorded in paragraph 9 of their Extended Reasons, that did not take place until at any rate August 2002. They said:

"9. In August 2002, the post to which the Applicant had been appointed was moved from a band 3 post to a band 2B post in accordance with the procedures. Such change was theoretical and provisional under the procedure and was approved by the doctor member of the LRAT [the NHS body responsible under the procedure], Dr Vicki Fearne. We note that in that letter of 30 August 2002, Dr Fearne states that as always any specialist registrars already in post or already appointed into this rotation at band 3 must be pay protected at band 3. In due course following the assessment of the post, Dr Fearne gave official approval to recognise these posts at band 2B based on a full shift pattern of working, by letter dated 24 March 2003. The effective date of compliance was therefore 2 September 2002 when the provisional 2B banding was effected."

2 September 2002 was also of course the date when Dr Qasim, and no doubt many other specialist registrars appointed that year, took up their appointments; and it is not disputed as a fact that the rebanding took effect from that date.

6. The relevance of all that appears from the next paragraph of the Tribunal's Extended Reasons, where they recited the provisions of the national Whitley Council agreement on terms and conditions of service, which had been applicable since 7 February 2001, as they applied to require the pay protection to which Dr Fearne had referred in giving approval to the change of this post to a band 2B basis. The relevant one for our purposes is paragraph 21(l), which the Tribunal cited in full, and it is the one on which Dr Qasim placed reliance in pursuing his case for the additional pay protection he sought. It is in the following terms:

"Where a future post / placement in a rotation, which has been accepted by the practitioner at pay band 3, becomes compliant before 1 December 2002, the practitioner when they take up that post / placement shall retain the overall salary protected at the pay band 3 rate applicable at the time of the re-banding, for so long as it is more favourable and for the duration of that post / placement. The salary shall be increased only to take into account of increments in the base salary on the old scale."

That, as can easily be understood, is a "no-worse-off" provision. It is described as mark time pay protection for people who had already accepted posts which currently carried a band 3 supplement, in the event that such posts were rebanded to a different band at a later date. It reflected corresponding protection for practitioners who were already in post with a certain band supplement entitlement at the time when the band rating was altered.

7. On those facts, the Employment Tribunal rejected the submissions of the Trust that Dr Qasim had no effective contract which he had accepted at band 3 so as to entitle him to the pay protection under clause 21(l). The crucial issue before the Tribunal and before us was the effect of the letter offering appointment which was written to Dr Qasim by a Mr Tom Power, who was the "Medical Workforce Officer – Paediatrics" of the London Deanery, conducting the interviewing and appointment arrangements on behalf of the Great Ormond Street Hospital as well as a number of other hospitals within the London Post-Graduate Deanery region. That was before the Tribunal and it is before us at page 72, and some reliance is placed on its express words, so we will quote it; it is dated 4 April 2002:

"Dear Dr Qasim,

Post: Specialist Registrar in Paediatric Immumnology/Infectious Diseases
Great Ormond St Hospital – IMIN/GOS1-N

Further to your interview, I have pleasure in offering you the above appointment with effect from 2^nd September 2002, for a period of one year.

This appointment is subject to written evidence of registration with the General Medical Council and to occupational health clearance. The Medical Personnel Department at Great Ormond St Hospital will contact you regarding your appointment and induction.

To accept this appointment, would you please sign both copies of this letter of offer and retain a copy for yourself, returning the other directly to me."

That was signed by Mr Tom Power, (who had been the person in charge of the advertising and supply of job description details to the applicants, including Dr Qasim) and the letter is copied to the Medical Personnel Department at Great Ormond Street Hospital. As is not now disputed, Dr Qasim returned the form of acceptance, as requested, saying:

"I accept the appointment as Specialist Registrar in Paediatric Immunology/Infectious Diseases on conditions as mentioned above and will undertake to be registered with the General Medical Council during the period of my training."

8. The other material document in existence at that time to which reference should be made is the advertisement in the BMJ which had resulted in Dr Qasim applying and being interviewed, which simply described the nature of the post as a one-year appointment; it stated that the appointments were being coordinated at the London Deanery and Mr Power's name was given as the person to supply further details. The job description at page 71, which consisted of the only "further details" that were in evidence before the Tribunal, described the post as a Specialist Registrar in Paediatric Immunology/Infectious Diseases at Great Ormond Street. It gave an outline of the programme, referred to the clinical training and responsibilities, gave other professional details, and concluded with a heading "Rota Arrangements", under which was written "1 in 6 with prospective cover", which it will be recalled was the rota basis on which, according to the Tribunal's findings, Dr Qasim was already working in the same unit at Great Ormond Street Hospital, under his existing post, placed in band 3 because of the hours worked.
9. The Tribunal, as we have said, rejected the submissions of the Trust that that exchange of letters was incapable of constituting a valid binding contract including provision for supplementary remuneration at band 3, accepted by Dr Qasim at that band so as to bring him within clause 21(e) of the payment protection provisions. In particular the Tribunal rejected the submissions of the Trust that no effective contract at all had come into existence before a further letter which the Trust had written, dated 16 July 2002. In that further letter the Personnel Officer at Great Ormond Street, a Mr Valentius Clarke, also expressed himself to be formally offering the appointment to Dr Qasim. The letter gave the start date of
   2 September 2002 and set out specific amounts for the salary scale for this post, and added "Your banding is likely to be Band 2B, this will be confirmed on your start date". The Employment Tribunal found, and it is not disputed, that that reference to the post being at band 2B was never accepted by Dr Qasim. Instead he wrote back on 23 July 2002 saying specifically that he had been advised by the BMA that as the post was advertised, offered and accepted as involving a 1:6 on-call rota, he should apply for pay-protection, since he was entitled to band 3, even though the post might become compliant before 1 December 2002, so that the protection at the band 3 rate should apply to him for the duration of his post.
10. The Tribunal, in summary, found that that was a correct analysis of the situation, saying in paragraph 15 of their Extended Reasons that they concluded that they had essentially to look at two matters: first, the contractual position between the parties, and in particular the nature of the offer made by Mr Power to the Applicant in (April) 2002, and secondly the meaning of paragraph 21 of the (applicable) amended terms and conditions of service. They concluded that the contract had actually been completed in April 2002 when Mr Power had made the offer in the terms he did and the Applicant had accepted it by sending back a signed copy of the letter. As regards banding, although that was not specifically mentioned in that correspondence, the Tribunal concluded that the offer and acceptance had been on a band 3 basis, saying in particular that:

"The post was clearly stated to be a 1:6 on call rota in the job description, and at that time such a post attracted a band 3 supplement. The Applicant had participated on the same rota for the previous two years. There was no suggestion then that the banding or work pattern would change and it only became the subject of the New Deal procedures from June 2002. We further conclude that the letter from [Mr] Power offering the post contained sufficient terms and conditions and was not uncertain or incomplete. The post was to be for a fixed term of one year and was subject to Whitley terms and conditions on pay, as was recognised by the parties."

They continued in paragraph 15.3 that:

"The Applicant's understanding, as was clear from his evidence, was that he was accepting a post that was at that time at band 3. We have not heard from [Mr] Power, but we are sure that if he turned his mind to this issue he would have agreed with the Applicant that the post attracted a supplement at band 3. Thus, the contract was concluded in April 2002, the post offered and accepted at a time when it attracted a band 3 supplement, and nothing that was written later in July or indeed in the formal contract that followed in November 2002 could affect this."

On those facts the Tribunal concluded that the Applicant fell squarely within the terms of paragraph 21(l), giving him the pay protection, which the Tribunal referred to in paragraph 15.4 of their Extended Reasons saying:

"Paragraph 21(l) is quite clear, and we find that it applies exactly to the situation here. This was a future post in a rotation which had been accepted by the Applicant at pay band 3 because that was the pay band applicable to it at the time that he accepted it."

On that basis, as the Tribunal also found that this post in fact became compliant before
1 December 2002, the pay protection under paragraph 21(l) applied to him.

11. Against that Decision the Trust appeals by a Notice of Appeal submitted on
    20 September 2004, which put forward numerous grounds of complaint about the Tribunal's Decision, including at one point that the Tribunal had ignored what the Trust itself had been "intending" to offer. But as the grounds of appeal have been helpfully refined and focussed for us by Mr Donovan in his skeleton and oral argument, the ground on which the appeal has been pursued really came down to a single, what he described as an "overarching point"; namely that the Employment Tribunal had erred in law in holding that Dr Qasim had been offered and had accepted his post at band 3 in April 2002. It was no longer contended before us that Mr Power had been without authority, actual or ostensible, to make any binding offer on behalf of the Trust in April 2002; and the Employment Tribunal's finding of fact that Dr Qasim had accepted the offer then made to him was also no longer challenged before us. However what was said was that the terms of that letter from Mr Power were insufficiently certain to form the basis of a binding contract because they failed to spell out the remuneration being offered in terms of banding, and the Tribunal had misdirected itself in concluding that the offer in fact made encompassed band 3. It was further said that the Tribunal failed to apply an objective test in construing the offer, and if they had done so, could only have concluded that no ascertainable terms with regard to banding were at that stage offered at all; or at least that, in the context of the New Deal process referred to in the Tribunal's Decision, the band status of this particular post could only have been assumed by a reasonable person to be uncertain, because of possible changes that might come to apply to it by the time the appointment came to be taken up.
12. Despite Mr Donovan's arguments, we have not been persuaded that that is the correct way of looking at the matter, or that the Tribunal fell into any material error of law with regard to the contract concluded between the Trust and Dr Qasim. As the Tribunal correctly identified in paragraph 15.1 of its Extended Reasons, it had two issues principally to consider, both largely factual, and these were what offer had in fact been made to Dr Qasim and accepted by him, and whether any terms thus agreed fell within the terms of the pay protection under the nationally agreed Whitley terms and conditions.
13. There was no real dispute between Counsel on the relevant law, which involves very basic principles under English law of when a binding contract comes into existence by offer and acceptance. As most if not all law students learn in their first term, offer and acceptance in the English Law of contract is objectively judged, according to what one student textbook used to describe as the "phenomena" of agreement, which may not always necessarily coincide exactly with the subjective intentions of one party or the other. Thus if a person makes, either himself or through an agent, an offer to a certain effect construed objectively, and in those terms it is accepted, then that is the basis for a legally binding contract; and it is no answer afterwards for the offeror to say that he did not mean what was said by him or on his behalf, or, as not infrequently happens, that he would not have meant to make the offer in those terms if he had thought about it more carefully at the time.
14. The first question for the Tribunal was whether an offer and acceptance in sufficiently certain terms to constitute a binding contract of employment tool place on April with the exchange of letters between Mr Power and Dr Qasim. The previous denial of Mr Power's authority is now abandoned and the only question is what was objectively to be taken as offered, and whether that offer included sufficiently certain terms as to the banding of the particular post offered to Dr Qasim. Here the terms of the letter itself and the acceptance Dr Qasim was required to complete and send back were clearly intended on both sides to create legal relations at once. The way they are worded is simply inconsistent with any other reading. Further, the letter and the offer it contained was made against the background of a nationally agreed pay structure of which both parties were well aware, which included specific provision for specialist registrars' posts such as this one, and provisions relating to the banding arrangements and for specific pay protection to apply to posts accepted for future dates where the banding arrangements might change between the date of acceptance of the post and the date it was to be taken up.
15. Against that background, we have no doubt that the Tribunal was entitled to find that there was no material uncertainty to prevent the existence of a binding contract at the time of the exchange of letters in April. The fact that important terms as to remuneration or otherwise are not expressly stated in the letter itself is not of course a bar to the existence of a legally binding contract, provided that such matters are ascertainable with reasonable certainty by reference to other documents, in particular, nationally agreed and statutorily approved pay terms and conditions, such as existed in this case. In this context we have had our attention drawn to a judgment of the former President of the Appeal Tribunal in Riniker v University College London (EAT/0962/95), the judgment being delivered on 23 August 1999. In that case the Employment Tribunal had refused to accept a university teacher's complaint on the ground that she had no binding contract, the agreement she relied on being held insufficiently certain because there was no express term agreed in relation to the level of salary to be paid. Reversing that decision, the Appeal Tribunal, in its unanimous Decision, said at paragraph 72:

"It seems to us that teaching posts in Universities are subject to well known scales. It was perfectly possible to determine her scale by reference to published material, her previous employment and to what others in a like position to herself were paid. This material provided the basis upon which the salary could be calculated with reasonable precision."

That approach, which accords with basic and well established principles of the law of contract, appears to us to be equally applicable here. The Tribunal were in our judgment entitled to find what the terms of the offer made as to remuneration relating to this particular post were by reference to the nationally agreed Whitley terms.

16. As to the banding for the post, which was the crucial point relied on by Mr Donovan, again the Tribunal were in our judgment entitled to find as they did, that the post offered to and accepted by Dr Qasim in April 2002 was in fact a non-compliant post at that time, within
    band 3 and attracting a band 3 pay supplement. We consider there is no doubt that in
    paragraph 15.2 of their Extended Reasons the Tribunal were in fact applying an objective basis in so finding. Indeed the only reasonable construction for such an offer made in the context of the nationally binding terms and conditions was that the current banding was applicable to the post being offered, unless some express reservation was included in the offer to disapply the effect that the nationally agreed terms and conditions would otherwise have on the contract.
17. The Tribunal were further entitled to hold, in our judgment, that the basis on which Dr Qasim in fact accepted the post was as a band 3 post, and that he so understood it at the time. That, in our judgment, is a sufficient basis for their holding, as they did, that he "accepted it at band 3" within the terms of paragraph 21(l) of the national terms and conditions applying pay protection to such instances. It was at band 3 at the time of acceptance, and that was the basis on which he accepted it. It does not detract from the correctness of that conclusion that either or both parties might, at the same time, have contemplated that the overdue revision and reduction of hours of work, and consequent possibility of re-banding, might in due course be undertaken and might even be completed so as to be in place by the time Dr Qasim came to take up his appointment. The Employment Tribunal were, in our judgment, right to say that this was exactly the situation for which express provision had been made in the Whitley terms in clause 21(l), covering the possibility of a future post being accepted at a time when a particular band applied, against the background of a re-banding exercise which might come to apply to that same post at some later date. We have not been persuaded that there is any misdirection or misconstruction of clause 21 in the Tribunal holding as it did.
18. In our judgment the position is accurately summarised by Mr Epstein on behalf of Dr Qasim, the Respondent in this appeal, when he said in paragraph 12 of his skeleton argument that:

"There was ample material on which the Tribunal could properly find that, even in the absence of express agreement as to Band 3, the offer and acceptance was on the basis of that particular band. There was offer and acceptance, intended to be contractually binding; the agreement was for a specific seniority of post, for a specific specialism, on a specific rota, at a specific hospital, where that post on that rota was banded 3, where [both parties] knew that it was band 3, and where [Dr Qasim] had already been working on that post [or an exactly comparable post so far as the hours of work were concerned] on that rota."

19. On that basis, the Employment Tribunal's findings and reasoning on the banding and the nature of Dr Qasim's contract with Great Ormond Street cannot, in our judgment, be faulted, and no other grounds to show that there was any material error in their Decision have been put before us. We therefore dismiss the appeal and affirm the Decision of the Employment Tribunal that there was a breach of contract in the Trust not paying Dr Qasim in accordance with the mark-time pay protection under clause 21(l), by reference to the band 3 rate. We would however emphasise that questions of this nature are primarily factual questions for the Tribunal dealing with the case to determine. It is a matter of construction and analysis of the facts of the offer made and accepted in each individual case whether a particular practitioner has been appointed to a post in circumstances where band changes are subject to the pay protection under
    clause 21 of the Whitley agreement or not.